FAQ
Legal assistance
What does legal debt collection consist of?
Legal recovery consists in the activation of procedures with the focus to force the debt collection of the due amount The legal action begins with a first step – the injunction of paymet the without success the precept is notified arriving to the last step the seizure of assets and/or bank accounts belonging to the debtor company
Are there any activities that are carried out before starting legal action?
Usually we proceed with an initial verification of the financial status of the company we intend to
Is it always possible to recover through legal means?
No, not always. While legal proceedings are some powerful tool, the outcome depends on several events, including the debtor’s ability to pay and the possibility to seizure his / her assets.
What is an injunction of payment?
An injunction is the procedure that allows you to obtain a payment order from the judge quickly (when the judges themselves are not late in reviewing the applications to verify their acceptance requirements).
Is debt collection more likely to be done out of court than legally?
There is no fixed recovery percentage between the two methods, as indicated in the question. Recovery depends on numerous factors, such as the type of debt, the debtor’s creditworthiness, and the strategies used.
Due diligence
What does due diligence involve?
Due diligence is a process of collecting and analyzing financial, legal, tax, and operational data to provide a detailed and objective picture before deciding on the steps to be taken for any extrajudicial or judicial action.
What is the principle of due diligence?
From an economical and business point of view , due diligence represents an in-depth analysis, a verification of a potential investment.
Does the due diligence has a special power ?
Its power confirm or deny all the facts, elements, and circumstances pertaining to a given transaction.
How important is due diligence or duty of care?
Due diligence is the way a company understands, manages, and communicates risk. This includes the risks it creates for others and the risks it encounters through its own strategic and operational decisions and actions.
How long does a due diligence take?
There are different types of due diligence. From one, two days to a month. It depends on the purpose of the due diligence required.
What is financial due diligence?
Financial due diligence is used to prevent critical issues from emerging once a deal has been finalized that are difficult or even impossible to resolve.
Customer Credit Check
How do I check a company's creditworthiness (in general)?
To check a company’s creditworthiness, financial data is primarily analyzed.
What financial data is analyzed?
Balance sheets (the last three ones already deposited), debt ratios, and cash flow.
Are there other indicative elements?
Yes, the additional verifiable elements are both quantitative and performance-related.
What are the quantitative and performance-related elements?
Organizational structure, target market, payment history, and ongoing procedures.
In general, what documents are used to acquire the data?
Company reports, checking Chamber of Commerce records, or rather, in this type of activity, what are called “historical” records.
Quantitative, qualitative, and performance analysis: how important are they?
Quantitative analysis through examination of the financial statements allows us to understand the company’s financial and equity situation. Qualitative analysis takes into account aspects of the company name, organizational structure, and the market in which it operates. Performance analysis collects information on the company’s historical performance, including protests, unpaid bills, and reports to the central credit risk agency
Foreign debt collection
What does foreign debt collection involve?
Foreign debt collection involves managing activitiesn with the aime to collect unpaid invoices from debtors residing abroad or foreign creditors who need to recover non-performing debts from foreign debtors.
What types of foreign debt collection are there?
As per debt collection in Italy, foreign debt collection also involves a pre-trial and a judicial phase.
What activities are carried out during the out-of court phase?
The activities carried out include: sending reminders via email to regular accounts, attempting to contact the client by telephone, and sending legal warnings prior to any legal action.
What does legal judicial debt collection consist of?
On abroad, the judicial debt collection varies from country to country. Basically, the debtor is pursued through a form of injunction and subsequent proceedings, more or less like in Italy. Before any decision is made, a thorough due diligence is conducted to determine the feasibility of legal debt collection.
Are there any activities carried out before initiating legal action?
Preliminary activities vary from country to country. Asset searches can certainly be carried out in the event of a seizure when the injunction, after the write of execution, does not bring to the expected results.
Are there similar success rates between extrajudicial debt collection abroad and legal debt collection?
There is no fixed recovery percentage between the two methods as indicated in the application. Recovery depends on numerous factors such as the type of credit, the debtor’s creditworthiness, and the strategies used.
Start up
What can be done to avoid the risk of defaulting on financial commitments?
In the current economic climate, trust between business partners is a fundamental asset for developing solid and lasting relationships.
What is the most significant risk?
It is certainly necessary to have a specific focus on the risk of insolvency.
What can be done to avoid the risk of insolvency?
Risk Management , in order to conduct pre-agreement checks is necessary to avoid the risk of insolvency. Conduct asset investigations of the company with which you intend to establish a business relationship.
What are other side effects that generate the risk of insolvency?
In addition to payment delays, and therefore poor cash flow management, reputational damage also plays a role. Equally significant are increased operating costs, difficulty accessing credit, and erosion of trust.
How can we prevent the risk of insolvency?
There’s no shortage of tools to prevent the risk of insolvency, such as proper financial planning.
When it's too late, what can you do?
When it’s too late, relying on an organized debt collection and management network with knowledge of your own operations is highly recommended. It’s not just a matter of collection, but of managing the situation from multiple perspectives.
Commercial debt collection
What does commercial debt collection involve?
Commercial debt collection involves the implementation of activities necessary for the debtor to pay the creditor and is differentiated between out-of-court and judicial collection.
What does out-of-court debt collection involve?
Out-of-court debt collection involves formal attempts to obtain payment for overdue and unpaid invoices.
What activities are performed during this debt collection phase?
The activities performed include: sending certified email reminders (PEC) – emails to regular accounts if no certified email address exists (in the case of private debtors); telephone contact attempts; collection visits; and sending legal warnings prior to any legal action.
What approach is best for success?
A moderate approach, both verbally and in writing, is necessary. Empathy can make the debtor feel understood and more inclined to resolve the outstanding debt out of court.
When does the debtor fail to cooperate?
Evaluate the various options for judicial recovery.
What is the out-of-court recovery rate?
There is no fixed recovery rate. Out-of-court recovery depends on numerous factors, such as the type of debt, the debtor’s creditworthiness, and the strategies used.
Debt Collection for Bankruptcy Proceedings
What to do when a debtor company has been lodged into the judicial proceedings?
There are procedures and procedures. A very specific process must be followed.
What to do when the debtor company is in judicial liquidation?
The creditor usually receives a specific written communication from the judicial liquidator appointed by the Courl informing him/her of the legal procedures about the debtor’s company. Contact the judicial liquidator via PEC legal email created by the bankruptcy dept. of the competent Court.
Does the creditor company enjoy any special privileges?
A commercial debtor company does not enjoy any privileges when it must be lodged into the bankruptcy proceedings. It is defined as “unsecured. In the case of a bank, financial institution, or employee, the matter is handled with a privilege; therefore, those in this category who intend to join the proceedings are defined and listed among the “privileged” parties.
How long does an unsecured and secured creditor have to file a bankruptcy application?
30 days before the debt verification hearing to promptly file a claim for admission to the list of liabilities. If this deadline is exceeded, the application is considered late but can still be filed within a certain period. Late applications must be filed within 12 months of the filing date of the decree of enforceability of the list of liabilities.
Where can I find the judgment declaring the opening of the bankruptcy proceedings?
It can be downloaded from the official public bankruptcy website.
What is the success rate for debt recovery through judicial proceedings?
The success rate for debt recovery through judicial proceedings varies, but on average is around 50-60%, although some specialized companies report higher percentages (up to 71%) thanks to a thorough pre-analysis. The likelihood of success depends on factors such as the age of the loan, the debtor’s solvency, the solidity of the documentation, and the effectiveness of the asset seizure.